You're right in the long run; rising bond prices mean lower rates which spurs economic activity (cheaper borrowing etc) which should be good for equities.
In a short term view however, falling yields (and therefore rising bond prices) can precipitate a drop in equities, viewed as the classic flight to safety (as bonds are safer so investors rush in pushing prices up). These moments can be seen as turning points for equities; when there's a sudden buy up of safe assets.
Instead, a lot of the literature (not that that is always correct) focuses on term spread (aka risk premium, yield spread etc etc), being the difference between 10yr and 3m yields as an indicator for inflation and economic activity. The difference between the two yields gives the yield curve its 'steepness'. As more and more investors clump up and demand bonds with longer maturities (which are riskier than shorter dated bonds, yet at the time less risky than substitute assets like equities.. in their minds), yields at that end of the curve fall (and prices will rise leading to capital gains). A very flat or inverted yield curve can suggest a future period of bearishness; lower growth, lower inflation and lower rates (probably the most modern theory on this is the 'preferred habitat theory').
But a lot of the theory breaks down in such a low rate environment. Would an inverted yield curve suggest lower rates in the US, EU or Japan? I'd like to see them try heh.
Anyway that's some of the theory. But again the theory isn't always correct.
Hope it wasn't too boring lol.
If I'm wrong I'd happily like to hear why of course. Just my understanding of it.
